Malta made history last week as the first country to pass new regulations for operators in the cryptocurrency, blockchain and DLT space. The announcement was hotly anticipated as the European nation already has a reputation for being crypto friendly. In fact, key exchanges like Binance and BitBay have moved operations there.
The three laws–Malta Digital Innovation Authority Act (MDIA Act), Innovative Technology Arrangement and Services Act (ITAS Act), and Virtual Financial Assets Act (VFA Act)–provide guidelines for ICOs and exchanges, as well as establish an authority for DLT.
It is being reported that Malta’s National Blockchain Strategy comprises of six key projects that are about more than just distinguishing an equity from a security. Check it out:
6. Public Registries/Services on the Blockchain
This project has been underway since September of last year. It was then the Maltese Ministry for Education and Employment announced that it would be placing all academic records on the blockchain.
It is the first step in a project intended to improve the delivery of all public services in general.
5. R&D and Education on the Blockchain
Malta is marketing itself as the blockchain island and is undeniably a world leader when it comes to regulation. But, what about education around blockchain technology in general? What is Malta doing to foster their domestic talent pipeline, increase understanding of blockchain technology and accelerate its adoption?
This project is about educating the general public and instigating R&D and new programs and courses in schools and universities. These include courses about smart contract technologies, as well as the creation of a Blockchain Laboratory. This will provide educational services about Blockchain technologies, particularly in the public services sector that will need to use it on a daily basis.
4. Create a Regulatory Infrastructure and Appoint a Blockchain Regulator
As we saw from the news last week, Malta is already quite active when it comes to enforcing crypto regulations. In fact, appointing a blockchain regulator is probably the most important of all six projects, since it allows for the creation of everything else.
As the ledger is so universal and generic, it can and will affect every industry. Therefore, there needs to be a regulator for cases when blockchain impacts several areas. This is to prevent confused legislation or opinions arising from entities that are from different spheres. Finances clashing with gaming, taxation contradicting securities commissions, etc.
3. Regulate Cryptocurrencies, ICOs, and Exchanges
Malta does not distinguish between “cryptocurrency” and “blockchain” but rather more sees the two entities as being intertwined.
However, there is a mechanism in place to weed out bad cryptocurrencies, to qualify whether an offering is a security, utility, or a “hybrid”. Malta was seemingly slow to regulate ICOs, however, all regulation had to comply with the European Union and Malta’s famous iGaming industry.
2. Digital identity (of Individuals and Legal Entities) on the Blockchain
A rather more long-term goal, this project is focused on providing individuals and legal entities with their own digital identity. Following Estonia’s lead, this will eventually allow residents to have a digital E-residency–but it doesn’t stop there. Malta feels that for the Internet of Things to flourish, we also need a strong handle on the Identity of Things.
As more and more “things” are out there and communicated, many of them will be autonomous, which can potentially be problematic. For all the millions of things, we need to be able to assign them an identity.
1. Smart Governance
Certainly the most ambitious of all Malta’s goals when it comes to blockchain technology is smart governance. This is a project that seeks to replace certain elements of public service and government functions with smart contracts. This would be functions like tax collection, licensing, etc. However, smart governance is still a long way off at least until smart contract technology matures.
While we keep hearing about STOs in the USA and now ETOs in some parts of Europe, Malta is blazing the trail in terms of crypto adoption from a global standpoint.